To outsiders, Dubai’s eager procedure for wealth and its fascination with glitz is probably the city’s most intriguing traits. And while there is more on the emirate than supercars and cheap diamonds, the simple fact remains that, among the world’s great gold trading hubs, our city is the place to adorn yourself with riches.
In July 2013, gold posted its worst quarterly drop in 113 years. Without any tax about the precious metal, Dubai is a perfect location to purchase it, but does that mean it’s a rewarding investment? Not really, based on Keren Bobker, senior financial consultant at Holborn Assets.
‘Unless someone includes a crystal ball it’s impossible to calculate if gold is an excellent investment,’ she says. ‘The price may be volatile and there is no guarantee that you can certainly make money.’ Unlike many investments, including shares and property, you can’t take money as a result adds Keren. ‘I’m more concerned that folks develop their savings within a diversified portfolio for his or her long-term benefit, than speculate on watch video here. It ought to be kept as not more than 5 percent of your own total investment assets,’ she adds.
Should you decide to invest in gold, don’t be fooled into stocking up on gold bars from a of Dubai’s gold dispensers (you’ll see them in Atlantis, The Palm and The Dubai Mall). ‘It seems very gimmicky,’ says Keren. ‘A serious investor will not be going to buy from your machine, therefore i imagine it’s more of a tourist souvenir, especially when you consider where many of the machines are.’ Instead, Keren suggests you head straight for that jewellery shops. ‘The most popular approach is probably by purchasing jewellery. This is certainly largely sold by weight in the UAE [untrue elsewhere], along with the workmanship can improve the price,’ she says. The greater number of intricate the design, the greater you are likely to pay.
Gold bullions can be bought with the gold souks and certain banks, including Emirates Gold, Al Abayad Jewellers in Sharjah and Credit Suisse, as well as online dealers. ‘You can start using a coin (some kind of special UAE ones exist) costing less than Dhs1,000, a very small bar of just an ounce, or move completely around massive bars weighing several kilos,’ she says. ‘Bullions must be held in a bank vault, not in your home.’
And once is the best a chance to buy gold? ‘If only I could possibly predict that,’ says Keren. ‘The best time takes place when costs are low, which means you must monitor the market,’ she says. But investors ought to be mindful of indicators which bring about the fluctuating value of gold, including sentiment, governments buying to promote rega1 reserves and once equity charges are volatile. Concerning selling, Keren says holidays are often a good time to strike. ‘You may see some small surges from time to time of holidays when gold is traditionally bought in some countries,’ she says. ‘India is definitely the world’s biggest gold importer along with a lot is purchased at Diwali and Akshaya Tritiya, along with during Eid in the Muslim world.’
India might be the world’s biggest importer, however, there is often little understanding as to why Dubai is probably the best places to buy gold. ‘It’s partly as a result of historical reasons and due to sheer number of trade here. Both Arabs and Indians have historically been interested in gold as an alternative to putting funds in the bank,’ she says. ‘In many cultures it really has been tradition for a woman to utilize your family wealth, particularly ahead of the introduction of safe banking. Some traditions die hard.’
For all those eyeing gold being an investment, Keren reiterates her view that it’s important to proceed with caution. ‘When being bought for investment it ought to be considered an assets class as with any other and the factor to a healthy investment portfolio is diversification. Never put all your money into one asset.
That’s incredibly risky if you have no control of market prices,’ she says. But given that you’re in Dubai, there’s no harm in adding the odd piece in your jewellery collection.